Idiosyncratic Partner Investments and Performance of Cosmetics Manufacturing Firms In Nairobi County: The Moderating Role of Supply Chain Technology

Abstract

In many industries, complexity and uncertainty have increased to the point that competing autonomously is no longer an option. The characteristics of products produced and processes involved in manufacturing contribute to the complexity of the relationship. Speed, quality, and flexibility are being emphasized as means of responding to the unique needs of customers and markets. Implementation of supply chain integral relationships has been advocated as the means of increasing competitiveness of firms. The study specifically addressed the effect of Idiosyncratic Partner Investment on the Performance of cosmetics manufacturing firms in Nairobi County, Kenya. Relational View theory was adopted in the study. The study adopted Positivism Research Philosophy. Cross-sectional survey research design was used in the study. The unit of analysis was 714 employees working in the procurement departments in cosmetics manufacturing firms in Nairobi County, Kenya. A sample of 256 was selected from the target population using a Multi Stage Sampling Technique. Primary data was collected using self-administered semi-structured questionnaires which were dropped and picked later. Both descriptive and inferential statistics were used to analyse the collected data. Moderated Multiple Regression (MMR) was used to analyse the relationship between the predictor variables and performance. Pilot study reliability results showed that all our Cronbach’s alpha coefficients were above 0.7, implying that the research instruments were reliable. The findings of the study showed that there was a positive and statistically significant correlation between idiosyncratic partner investment and performance (r=.529, p<0.01). The study concludes that idiosyncratic partner investments positively affect the performance of cosmetics firms. The study recommends that cosmetics firms should engage idiosyncratic partner investments, and make major investments, in time and effort to learn about the business practices of their suppliers, specifically for relational exchange. The results of the study will contribute to greater understanding of the supply chain integral factors that leads to outstanding performance of firms.